GIPSA officials are meeting the ministry officials on Monday to work out the final details of wage revision and the date of notification..
in a late afternoon development on Sunday, the National Confederation of General Insurance Officers’ Association in a letter to Suchita Gupta, CMD, National Insurance Company and chairperson, GIPSA warned, “Any unilateral decisions on wage revision shall not be appreciable and may vitiate the IR (Industrial Relations) environment”
The ministry of finance(MoF) has finally rejected the demands of unions, belonging to the public sector general insurance industry, for a wage revision on par with Life Insurance Corporation(LIC) and is now set to notify 12 per cent hike for the 44,000 workforce of the industry.
The ministry is yet to make an official announcement about the conclusion of the ongoing wage revision negotiation and GIPSA officials are meeting ministry officials on Monday to to work out the final details of wage revision and the date of notification.
Though, unions have got an advance indication of the `unpleasant though not entirely unexpected development’ where their long standing demand to have a pay parity with LIC is finally being rejected and 12 per cent hike, as offered on August 4, will be enforced by the MoF unilaterally, they are yet to respond to the new situation officially.
However, in a late afternoon development on Sunday, the National Confederation of General Insurance Officers’ Association in a letter to Suchita Gupta, CMD, National Insurance Company and chairperson, GIPSA warned, “Any unilateral decisions on wage revision shall not be appreciable and may vitiate the IR (Industrial Relations) environment. G I P SA Management should take the workforce into confidence on all such matters. We are eagerly waiting for early communications from your side.”
The letter further says “Now it is more than a week that we have not heard anything on our demands of Wage revision from GIPSA, which indicate that no serious thoughts are been given to our genuine long pending wage demands. This tends to create a displeasure amongst the employee communities in PSGICs and may lead to IR actions.”
As the issues over the amount of hike was dragging on for some time, industry sources point out that the top management of PSU four general insurers and GIC Re earlier had informed the ministry that either they have to accept the demands of the unions or just notify the `12 per cent hike along with five-year arrears from August 2017′ to put an end to the sensitive matter.
In fact, during the meeting among the officials of department of financial services(DFS), top management of GIPSA companies and unions, on August 27, Suchita Gupta, CMD, National Insurance Company and chairperson, GIPSA had told unions that 12 per cent of wage hike was a final offer and Sourabh Mishra, joint secretary, one of the government’s key hands in the ongoing wage negotiations, had urged the unions to accept the offer.
However, the unions in the meeting had insisted on a pay hike on par with LIC and wage negotiation had remained inconclusive.
The government last year had approved a 16 per cent wage revision with arrears and 15 per cent of hikes with arrears for the employees of LIC and PSU banking industry respectively.
Earlier, refusing to accept the latest offer of 12 per cent pay hike with full five year arrears since August 2017 made by the GIPSA, the unions of PSU general insurance industry had said it was far much lesser than the wage revision granted to state owned LICI and ECGC.
“Pay scales offered to us as on 01st August 2017 with loading factor of 10 per cent put us in most disadvantage when compared to those granted to LICI and ECGC,’’ said unions on in their letter to Gupta.
With the 12 per cent hike along with five years of arrears, wage bill for National Insurance Company will be around Rs 2177 crore , Rs 2080 crore for New India Assurance , Rs 2135 crore for Oriental Insurance Company and Rs 1752 crore United India Insurance.
There will be a total outgo of Rs 8146 crore from all four companies for meeting wage revision expenses, said analysts.
“Whether, the companies particularly, three financially weak companies including NIC, United India Insurance(UII) and Oriental Insurance Company(OIC) have sufficient funds to pay the higher wage bill either with arrears or excluding arrears or they need further capital from the government is yet to be known,” said industry sources.
The ministry has already informed the unions that the next wage revision will be based on the performance of each of PSU general insurers and each individual within the company.
Wage revision of each employee to be linked with the performance of the organisation and his/her own performance, GIPSA had said in its letter to the unions of the industry.
GIPSA is the official coordinating body for the four PSU general insurers, New India Assurance, OIC, NIC and UII GIC Re.
According to the new plans, primary component of the wage revision will be variable (performance based). However, a small fixed component of the pay shall be towards the cost of living adjustment during each appraisal and wage revision cycle, said the GIPSA.
Measurement of performance will be made absolutely objective, based on key performance indicators identified for each employee as well as the performance milestones set for each organization. APAR(annual performance and appraisal report) and promotion policies will be modified accordingly to recognize and reward good performance, said GIPSA.